What's in your smartphone?

Arming militias in a war-torn region of Africa? There’s an app for that.

By now, just about everyone has heard of blood diamonds, but you may not know their close cousins: “conflict minerals.” They include metals such as gold, tantalum, tungsten and tin, used to fuel your smartphone’s vibration mode or help maintain your camera’s battery life. In fact, they exist in just about every computer or electronic gadget you own.

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They are heavily sourced from the Democratic Republic of the Congo, where warlords control mines and smuggling routes, profiting to the tune of more than $185 million annually by terrorizing locals into extracting the metals for little or no pay. Human rights groups report that more than 5 million Congolese have been killed by the militias, which, in addition to mining, force children to serve as soldiers and sexual slaves. Once the ill-gotten metals are mixed in smelters, it is impossible to trace to their source.

“The direct connection between our consumer appetites and violence in eastern Congo is a result of this: your cell phone,” said John Prendergast, holding up his own smart device. Prendergast is co-founder of the Enough Project, a humanitarian organization that has studied the sources and use of conflict minerals.

However, as the United States, the European Union and other governments take aim at conflict minerals with new regulations, manufacturers are battling humanitarian groups over just how much responsibility the companies will bear for keeping the metals out of their products. The business groups are pushing for wiggle room from coming regulations that might work to force changes in the supply chain.

Starting May 31, publicly traded companies will be required under a new Securities and Exchange Commission rule to disclose whether the metals in their products are “conflict free.” The new requirements stem from the 2010 Dodd-Frank Wall Street reform law and their enforcement powers from the 1934 law that created the SEC. Failure to comply could expose companies to lawsuits from shareholders if negative publicity over the use of the minerals causes consumers to boycott products and stock values to plummet.

The U.S. Chamber of Commerce, the National Association of Manufacturers and the Business Roundtable have joined forces to appeal a ruling by the U.S. District Court in Washington against their bid to block the law’s implementation. A decision by the U.S. Circuit Court of Appeals in the District of Columbia, could come in early 2014.

In their appeal, the business groups argue that the law violates their First Amendment rights because it compels speech, forcing them to post information on the Web. Further, it’s all but impossible to track the sources of minerals before they reach choke points like smelters, they say. They argue that companies whose products contain only tiny amounts of the minerals, such as diapers and surgical gloves, shouldn’t be held to the same strict standards as manufacturers that use more of the materials.

“You’re talking about a supplier of a supplier of a supplier,” said Tom Quaadman, vice president of the U.S. Chamber of Commerce Center for Capital Markets Competitiveness. “If you’re a big manufacturer, you’re being held responsible for everything down the line. There’s no way that a company could actually come up with that information.”

“An airplane can have 300,000 different parts,” Quaadman adds. “Think of how many different suppliers supply 300,000 parts.”

Businesses don’t brush off the importance of ensuring that their purchases don’t fund Congolese militias, Quaadman says. But they argue that they’re being put in a Whac-A-Mole situation: Cut off one source of funding and the militants will just find another. That’s a problem they say the State Department, rather than the SEC, is best suited to address.

Simultaneously, lobbyists for sectors as diverse as technology, aerospace and jewelry are begging Congress to ease the rules, and as the European Union considers an even more stringent law, they are urging U.S. negotiators to push for more-relaxed standards in trans-Atlantic trade talks.

The Chamber is “talking to people on the Hill about potential changes” that would make the SEC’s rule easier for companies to stomach, Quaadman says. Its proposals include carving out a “de minimis” exemption for companies that use minuscule amounts of the minerals and providing clearer guidance on a company’s due diligence obligations.

The consideration of Dodd-Frank-style laws by the United States’ neighbors to the north and across the Atlantic also has drawn the business groups’ attention. Canada is in the early stages of drafting a proposal, while the EU is expected to make a decision within weeks or months on its own regulation. Whether the EU rule will be weaker, similar or even stricter than the U.S. rule — for example, by expanding compliance to include major European retailers — remains an open question.